Cook, who was appointee to the seven-member Federal Reserve Board by former President Joe Biden, was targeted by Federal Housing Finance Agency (FHFA) Director Bill Pulte last week. Pulte accused Cook of mortgage fraud and called on Attorney General Pam Bondi to investigate Cook’s purchase of two houses in 2021.
By claiming that both houses were bought as a primary residence, Pulte said Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute.”
But no formal charges have been filed by the Department of Justice against Cook. In the letter firing Cook, Trump cites the criminal referral from Pulte to Bondi as giving him sufficient cause to fire her, although the FHFA director does not play a law enforcement role. Trump stated that as set forth in that referral, “there is sufficient reason to believe you may have made false statements on one or more mortgage agreements.”
Trump wrote: “The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve. In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”
Trump has been battling Federal Reserve Chair Jerome Powell over interest rates since his reelection. In April, he began to openly say he could fire Powell. But the negative reactions of the financial markets each time the president has suggested he would fire Powell (first in April and once again in July) has caused him to look for alternatives. He now seems intent on replacing members of the board of governors with his supporters.
On Aug. 1, Fed Governor Adriana Kugler, another Biden nominee, announced her resignation, ending her term almost six months early.
“The writing was on the wall two months ago,” HousingWire Lead Analyst Logan Mohtashami said Monday. “Trump wants lower rates, and he will put as many of his own people in the Fed chamber to get the votes to go against Powell. The numbers are growing in his favor against Powell now.”
Cook had refused to resign under Trump’s pressure.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” she said in a statement. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”